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When a landlord does tenant referencing, what do they check?

by | Mar 26, 2023

Home $ Property Management for landlords $ Tenant Referencing: What Do You Need To Know About It? $ When a landlord does tenant referencing, what do they check?

Are you a landlord or do you plan to become one soon? If so, you are aware that finding the right tenant can be a difficult task. So, it is vital you ask the question, how can you tell if a potential tenant is trustworthy and dependable? 

This is where tenant references come into play as it is a process that landlords and letting agents use to determine whether a tenant is a good fit for their property so you should be familiar with this procedure? 

This article answers the questions of what kind of documentation is required? What are the potential stumbling blocks that might prevent a tenant from passing? 

Furthermore the importance of tenant referencing, what landlords should look for during tenant screening, and the role of a guarantor will be discussed.

We’ll also go over recent legal changes that landlords should be aware of when it comes to reference checks so that by the end of this article, you will have a thorough understanding of tenant referencing and will be better prepared to find the ideal tenant for your property.

tenant referencing what do they check

What is involved in tenant referencing?

Tenant referencing may appear intimidating, but mainly you’ll want to know what documentation you’ll need to provide. Finally, we’ll go over potential roadblocks that could prevent you from passing and how to ensure you pass with flying colours. 

All of this will help you quickly secure your ideal rental property as a tenant.

Who pays for tenant referencing?

Did you know that landlords or letting agencies can no longer charge tenants for reference checks as of June 1st, 2019? This means that the landlord or letting agency must cover the cost of the service, including any guarantor references. 

So, even if the tenant does not pass the check, they cannot be charged. Fo more on this click here.

Tenant referencing is typically performed by specialised agencies that sell their services to landlords and letting agents. 

While some private landlords may do their own screening, the majority rely on these agencies. For conducting the necessary checks, the tenant referencing agency charges the landlord or letting agent directly.

Is tenant referencing required by law?

If you’re wondering if your landlord is required by law to provide you with a reference, the answer is no. If they do decide to give you one, it must be accurate. Any false or misleading information could land the landlord in hot water.

While there is no legal requirement to provide a reference, landlords should be aware that any deceptive remarks may result in a lawsuit. However, as long as the landlord can back up their claims with evidence, they are safe.

What is checked during tenant referencing?

Below are some of the things that are checked during tenant referencing.

A right to rent check

Your landlord is required by law to confirm that you have the legal right to rent a property in the United Kingdom. This means they must confirm whether you are a British citizen or have legal permission to reside in the country like this

You’ll need to provide documents proving your identity, previous address, and right to rent in the UK, such as your passport, to do so.

The proof of employment or income

If you work full-time, your landlord will most likely need to verify your income to ensure that you can afford to pay rent on time. This is usually accomplished by contacting your employer.

Landlords typically require 30 times the monthly rental rate, which means you’ll need to earn at least £18,000 if your rent is £600 per month. The purpose of this check is to ensure that you have enough money to pay your rent on time each month. The good news is that this check is simple to complete and requires little effort from your employer.

A credit check

Many landlords consider a credit check to be an important step in the screening process. However, it is important to note that a poor credit history only appears as CCJs or bankruptcy – other financial difficulties will not be visible.

As a result, a tenant’s current financial situation is far more informative than their credit history alone. Just because someone has had difficulty paying their rent in the past does not mean they will do so again. Of course, this assumes that their current circumstances haven’t deteriorated.

a landlord doing checks for tenant referencing

Any previous landlord reference

When requesting a tenant reference, you want proof that they are dependable and trustworthy. This includes making on-time rent payments and maintaining the rental property.

It’s a good idea to ask the landlord a few questions to get a clear picture of the tenant’s behaviour. These may include:

Did the tenant have any difficulties paying the rent?

Did the tenant cause any property damage?

Were there any problems with your neighbours?

Is the tenant’s deposit being refunded? Why not, if not?

Would they re-rent to this tenant?

A prospective tenant who is hesitant to provide contact information for their previous landlord may be a red flag.

Checking if there is a rent guarantor

Having a guarantor may be necessary in some cases, such as being a student or at the landlord’s request, but it is not a legal requirement. Your chosen guarantor is someone who will assume responsibility for your tenant obligations, such as paying rent, if you are unable to meet them.

As a result, the guarantor’s credit and affordability may be scrutinised. They will be given a copy of the lease and will be required to sign some documents indicating their willingness to serve as your guarantor.

You should be able to rent the property you’ve chosen if you pass the necessary reference checks and pay the deposit.

What should a landlord do if the tenant referencing fails?

Passing all of the reference checks is critical to ensuring you can rent your desired property. Although there are numerous reasons why a tenant may fail a portion of the referencing process, some are more serious than others.

If you need a guarantor, as long as they are appropriate, it should not hurt your chances of renting a property. You are more likely to be rejected if you have a poor credit history and a negative reference from your previous landlord. It is ultimately up to the landlord to determine whether or not you are a suitable tenant.

tenant referencing

In conclusion

The article explains what tenant referencing entails, including the importance of tenant referencing, what documentation is required, and potential roadblocks that could prevent passing.

Further to this, landlords or letting agencies can no longer charge tenants for reference checks, and while it is not required by law to provide a reference, if one is provided, it must be accurate. The article also discusses what is looked for during tenant screening, such as proof of right to rent, employment or income, credit check, and previous landlord reference.

A guarantor may be required in some circumstances, but it is not a legal requirement. If a tenant reference fails, it is up to the landlord to decide whether or not the tenant is suitable.

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andreas gerazis

Andreas Gerazis

Experienced landlord

Andreas is a certified landlord with extensive knowledge about the UK property market as he has been actively investing for half a decade. Founder of the first three-in-one property management software, Lofti Proptech, Andreas has a brilliant understanding of the details surrounding what it takes to grow and run a thriving property portfolio.